ROAS vs ROI: revenue return is different from profit return
ROAS divides attributed revenue by ad spend. Here ROI divides revenue minus all included costs by those costs. Revenue of 1,200, ad spend of 200 and product costs of 600 gives 6× ROAS but 50% all-cost ROI.
ROAS vs ROI: revenue return is different from profit return
| Metric | Calculation in currency units | Result | What the denominator includes |
|---|---|---|---|
| ROAS | 1,200 ÷ 200 | 6.00× or 600% | Ad spend only |
| Profit after listed costs | 1,200 − 600 − 200 | 400.00 | Not a ratio |
| All-cost ROI | 400 ÷ (600 + 200) × 100% | 50.00% | Product costs and ad spend |
Formula & method
ROAS = attributed revenue ÷ ad spend
All-cost ROI = (revenue − included total cost) ÷ included total cost × 100%Write down which costs are included before calculating ROI. In this example, product costs and advertising are included; shipping, refunds, payment fees, overhead and taxes are excluded unless added explicitly. ROAS can look strong while the business loses money if the remaining margin is too small.
Use one currency and aligned reporting windows. A platform may use assigned conversion value rather than collected sales revenue, so label that value accurately. Attributed revenue is an accounting or tracking result, not proof that every sale was caused by the campaign.
Worked example
Keep revenue at 1,200 and advertising at 200 but increase product costs to 1,100. ROAS remains 6×, yet the listed costs total 1,300 and all-cost ROI becomes −7.69%.
What can change the answer
ROI definitions vary; the displayed formula is an explicit all-cost model. Both denominators must be positive; missing costs make the result incomplete.
Sources & definitions
Method checked:
Continue with a related task
ROAS Calculator
ROAS is attributed revenue divided by ad spend. Revenue of 4,500 from spend of 1,500 gives 3× ROAS, equivalent to 300%.
Gross Margin Calculator
Gross margin is revenue minus included cost of goods, divided by revenue, multiplied by 100. Revenue of 1,000 and cost of 650 gives a gross profit of 350 and margin of 35%.
Markup Calculator
Markup equals selling price minus cost, divided by cost, multiplied by 100. Buying at 80 and selling at 100 gives a 25% markup, while the margin is 20%.
Target Margin Selling Price Calculator
Required selling price equals unit cost divided by one minus the target-margin fraction. A cost of 60 and a 40% target margin gives a price of 100.